Homeowners’ associations An HOA may not file a record of lien against a parcel for unpaid assessments unless a written notice or demand for past due assessments as well as any other amounts owed to the association pursuant to its governing documents has been made by the association. The written notice or demand must provide the owner with 45 days following the date the notice is deposited in the mail to make payment for all amounts due, including, but not limited to, any attorney fees and actual costs associated with the preparation and delivery of the written demand. The notice must be in substantially the form prescribed by statute. [F.S. 720.3085] A claim of lien must state the description of the parcel, the name of the owner of record, the name and address of the association, the assessment amount due, and the due date. The claim of lien secures all unpaid assessments that are due and that may accrue subsequent to the recording of the claim of lien and before entry of a certificate of title, as well as interest, late charges, and reasonable costs and attorney fees incurred by the association incidental to the collection process. The person making payment is entitled to a satisfaction of lien when they pay the assessment in full. In an HOA, a fine may not exceed $1,000 in the aggregate unless otherwise provided in the governing documents. A fine of less than $1,000 may not become a lien against a parcel. The association should consult with their attorney before filing a lien based solely on a fine. An HOA has five years in which to act on a claim of lien. If the parcel is subject to a foreclosure action or forced sale of another party, or if an owner of the parcel is a debtor in a bankruptcy proceeding, the HOA can file a lien but cannot foreclose. The parcel owner may serve and file with the court a qualifying offer at any time before the entry of a foreclosure judgment. The parcel owner must provide a copy of the filed qualifying offer to the association’s attorney by hand delivery, obtaining a written receipt, or by certified mail, return receipt requested. [F.S. 720.3085] A qualifying offer is a written offer to pay all amounts secured by the lien of the association plus amounts accruing during the pendency (time awaiting acceptance or rejection of the offer) of the offer. It must be substantially in the form provided in the HOA Act and notarized. The member may make only one qualifying offer during the pendency of a foreclosure action. If a parcel becomes the subject of a mortgage foreclosure or a notice of tax certificate sale while a qualifying offer is pending, the association can elect to void the qualifying offer. If the parcel owner becomes a debtor in bankruptcy proceedings while a qualifying offer is pending, the qualifying offer becomes void. [F.S. 720.3085(6)(c)] Filing the qualifying offer with the court stays the foreclosure action for the period stated in the qualifying offer. That is, the HOA cannot take further action to foreclose, nor can it charge any legal fees during the period of the stay other than the cost of a mortgage foreclosure, a bankruptcy proceeding, or other debt proceeding. The stay may not exceed 60 days following the date it was served and no sooner than 30 days before the date of trial, arbitration, or the beginning of the trial docket, whichever occurs first. This permits the member to pay the qualifying offer to the association plus any amounts accruing during the pendency of the offer. If the member fails to adhere to the terms of the qualifying offer, the association can immediately move to foreclose. At foreclosure, if the association has complied with all procedures, the association may collect reasonable attorney fees and court costs. By statute, an HOA may purchase the lot or home at foreclosure. If the association documents permit it, a condominium
for any length of time during which the association is prevented from filing a foreclosure action by an automatic stay resulting from a bankruptcy petition filed by the parcel owner or any other person claiming an interest in the parcel. [F.S. 718.116] Cooperatives A claim of lien is effective from and after recording a claim of lien in the public records in the county in which the cooperative parcel is located that states the description of the cooperative parcel, the name of the unit owner, the amount due, and the due dates. Except as otherwise provided in this chapter, a lien may not be filed by the association against a cooperative parcel until 45 days after the date in which a notice of intent to file a lien has been delivered to the owner. Notice is considered delivered when it’s mailed. The claim of lien secures all unpaid rents and assessments that are due and that may accrue after the claim of lien is recorded and through the entry of a final judgment, as well as interest and all reasonable costs and attorney fees incurred by the association incidental to the collection process. A claim of lien must be executed and acknowledged by an officer or authorized agent of the association. Upon payment in full, the person making the payment is entitled to a satisfaction of lien. The notice must be sent to the unit owner at the address of the unit by first-class U.S. mail, and the notice must be in substantially the form prescribed by statute. [F.S. 719.108] The lien is not effective one year after the claim of lien was recorded unless, within that time, an action to enforce the lien is commenced. The one-year period is automatically extended for any length of time during which the association is prevented from filing a foreclosure action by an automatic stay resulting from a bankruptcy petition filed by the parcel owner or any other person claiming an interest in the parcel. Foreclosing the claim of lien Foreclosure is defined as, “A legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments by forcing the sale of the asset used as the collateral for the loan.” The association may bring an action to foreclose a claim of lien or an action to recover a money judgment for the unpaid assessments without waiving any claim of lien. The association is entitled to recover its reasonable attorney fees incurred in either action. Condominiums The board must give at least 45 days’ written notice of its intention to foreclose a claim of lien; or, if the unpaid monies, including those coming due after the claim of lien is recorded, are paid before the entry of a final judgment of foreclosure the association shall not recover attorney fees or court costs. As noted above, a condominium must use a notice of foreclosure and follow procedures that are substantially the same as those provided in the applicable statute. [F.S. 718.116] Cooperatives The Cooperative Act is silent on the time frame regarding noticing foreclosure actions. If the unpaid monies, including those coming due after the claim of lien is recorded, are paid before the entry of a final judgment of foreclosure, the association shall not recover attorney fees or court costs. A cooperative must use a notice of foreclosure and follow procedures that are substantially the same as those provided in the applicable statute. [F.S. 719.108] Homeowners’ associations An HOA must provide 45 days’ written notice of intent to foreclose. If, after service of a summons on a complaint to foreclose a lien, the parcel is not the subject of a mortgage foreclosure or a notice of tax certificate sale, the parcel owner is not a debtor in bankruptcy proceedings, or the trial of, or trial docket for, the lien foreclosure action is not set to begin within 30 days.
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Book Code: CAMFL1524
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